Sara Lee also said on Friday it has seen significant interest in its household products business, which includes Ambi Pur air freshener and Kiwi shoe polish. The divestitures allow it to focus on its food and beverage businesses like Sara Lee baked goods and Hillshire Farm meats.

The deal also reinforces Anglo-Dutch Unilever's global lead in deodorants and skin cleansing and marks the first major acquisition for new Chief Executive Paul Polman. The businesses it is acquiring from Sara Lee see 85 percent of their sales in Europe.

Sara Lee CEO Brenda Barnes said she expected the entire household and body care business to be reported as discontinued operations in the current fiscal first quarter, a sign the company expects to be able to sell the other businesses.

As the process proceeded, it became clear that there were different people who had far more interest in different pieces of this, Barnes told Reuters in an interview. She did not say which companies were interested in which businesses.

Credit Suisse analyst Charlie Mills said the price Unilever is paying of 10 times core operating profit, or EBITDA, is not huge by industry standards, which reflects the fairly disparate collection of brands.

We're not convinced that this is the greatest collection of assets but another acquisition shows Unilever still moving from the back foot (cost cutting and disposals) to the front foot (volume growth and acquisitions), he said.

KEY EUROPEAN MARKETS

Unilever says the Sanex, Radox and Duschdas brands will complement its Dove, Axe and Rexona at slightly lower prices and strengthen its European business in key markets such as Britain, the Netherlands, Germany, France, Spain, Italy and Denmark.

Sara Lee said the brands sold accounted for 55 percent of the profits from its businesses up for sale.

BMO Capital Markets analyst Kenneth Zaslow said the deal is valued at about 1.7 times sales and 15 to 16 times earnings before interest and taxes, about in line with past household personal care deals.

The rest of the businesses Sara Lee is trying to sell are likely to receive lower valuations since the household business has a lower growth rate, but Sara Lee is still likely to receive total proceeds at the higher end of BMO's $2 billion to $2.5 billion estimate, Zaslow said in a research note.

Sara Lee also reiterated it intended to maintain its current quarterly dividend of 11 cents for the next four quarters regardless of the timing of disposals.

Sara Lee's board also approved a $1 billion share repurchase program. The plan is in addition to 13.5 million shares remaining to be bought back under a previous share repurchase program.

Unilever Plc shares were down slightly at 17.35 pounds in London, while Sara Lee shares were up 64 cents or 6.1 percent at $11.18 in early afternoon on Friday on the New York Stock Exchange.

The Sara Lee brands being acquired by Unilever generated annual sales in excess of 750 million euros with EBITDA of 128 million euros for the year ending June 2009. The overall Sara Lee business up for sale had annual sales of 1.5 billion euros.

The deal is subject to regulatory approval and consultation with European employee works councils.

($1=.6810 Euro)

(Reporting by David Jones and Brad Dorfman; Editing by Jon Loades-Carter and Matthew Lewis)